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Appendix C Market Outcomes

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Appendix C Market Outcomes Appendix C: Market Outcomes Introduction 1. This appendix presents preliminary data on market outcomes, including revenues, shares of supply and prices. We first present data on the consumer side of the platforms, focusing particularly on general search and social media. We then set out data on search and display advertising. Finally, we present different estimates of the size of the open display sector and shares of supply in the ad tech stack, as well as estimates of Google and Facebook’s ad tech revenues as a proportion of advertiser spend. 2. We are continuing to check consistency of information provided so far by the parties and collect additional data. The results presented below should therefore be treated as preliminary. We indicate in the text below where there are particular issues with the data which we are working to resolve, and where we are planning to do additional analysis following the interim report. Consumer outcomes 3. In this section we present analysis of: • how consumers spend their time online, including the time spent on online entities and the ‘reach’ of the largest entities; • market outcomes for the general search sector, including: the number of consumers accessing different search engines; shares of supply; consumer ‘cross-visiting’ behaviour across search engines; and the extent to which Google generates traffic to specialised search providers; • market outcomes for the social media sector, including: the number of consumers accessing different social media platforms; shares of supply; and consumer ‘cross-visiting’ behaviour across social media platforms. 4. The data underlying this analysis was sourced from third parties, specifically: • Comscore data underlies the majority of the analysis described above. The data is sourced from Comscore’s MMX Multi-Product (MP) interface. • Statcounter. We used Statcounter’s shares as one measure of search engines’ shares of supply and to inform our assessment of browsers’ shares. C1 5. We outline the methodologies of each of these providers below, before presenting our analysis. For the final report we intend to compare the data from Comscore and Statcounter with information provided directly by market participants. Sources of data Comscore 6. Comscore delivers online audience measurement across different devices (desktop, tablet, smartphone) for different types of content (including page content, apps, video). Comscore is endorsed by UKOM, the body that sets and governs the UK standard for the online digital measurement industry. Methodology 7. Comscore uses a ‘hybrid approach’ known as ‘Unified Digital Measurement’ (UDM), combining both ‘panel’ and ‘census’ data, where: • the panel data consists of recruited respondents who install metered software on their devices. Comscore’s UK panel consists of roughly 130,000 users, including 66 thousand users for desktop and over 12 thousand users for mobile (tablet and smartphone).1,2 • the census data is measured by Comscore ‘tags’ that media owners apply to their content. 8. These two sets of data are unified by Comscore and deduplicated,3 to create an overall view of individual consumer behaviour online. For our analysis we used Comscore’s MMX MP data. The MMX MP interface includes data from desktop, smartphone and tablet sources. 9. We have previously identified the following aspects of Comscore’s methodology that may result in limitations of the output:4 • Comscore’s methodology is complex and involves a combination of modelling and direct measurement. Comscore’s modelling relies on 1 As of October 2019. 2 Comscore told us that it measures the activity of ‘users’ or ‘visitors’ of online entities rather than ‘consumers’. However, we consider that Comscore’s definition of a ‘user’ or ‘visitor’ is consistent with our use of the term ‘consumer’ within this publication. Throughout this publication we use the terms ‘user’ and ‘consumer’ interchangeably and generally refer to individuals as consumers, including in our descriptions of the outputs based on Comscore’s data. 3 To ensure that a single user, using more than one device, is not counted twice. 4 See Annex E of the Fox/Sky Phase 2 Report. C2 assumptions, based on insights from panel and enumeration data sources. This modelling is likely to be less robust than direct measurement. • Comscore’s panel methodology could suffer from the same issues that affect online panels generally ie the results generated from Comscore’s panel may not be representative of the wider population as online panellists tend to be heavier internet or technology users. • As media owners may choose which of their web pages/apps/videos to tag, not all web entities are measured using the census data. Additionally, because the tags are applied at the discretion of the publisher, making direct comparisons between sites is difficult. 10. Comscore has previously responded to us regarding the limitations we identified: • In relation to the issues we identified with Comscore’s modelling and panel-based methodologies, Comscore explained that integrating both of these allows it to overcome the limitations suffered by each. For example: — Panel data: provides cookie-to-person conversion factors at the site level; allows for identifying and quantifying the extent of coverage gaps; and provides demographic information. — Census data: allows for increased granularity and stability, particularly for smaller media entities; facilitates quick coverage of new websites; delivers platform de-duplication insights; assures that all consumer activity within a media entity is credited; and provides an opportunity for calibration. • Comscore explained that it applies intensity weighting to its panel data to overcome the possibility that its panel is not representative of the population. This aligns the panel data with the actual intensity of use observed in the population as captured by the census data. • In relation to content tagging, Comscore explained that ideally all content would be tagged, but that there are a number of reasons why content may not be fully tagged or tagged at all. In these cases, Comscore works with existing information about entities’ audiences to report on their complete audience: — where content is not fully tagged, Comscore calculates the census tag coverage of the media entity. Comscore then uses its UDM methodology to account for the non-tagged portions of the entity, C3 allowing it to report on the entity’s entire audience. Comscore added that it works with UKOM and The Publishers’ Audience Measurement Company (PAMCo) to help publishers tag their content completely. — where entities are not tagged at all, they are measured through the panel data only, using weighted sample projections. For sites with lower traffic, this can be less robust than UDM based on both panel and census data. 11. We note that the limitations that we have identified previously have been addressed to some extent by Comscore in its response. Moreover, notwithstanding any remaining concerns we have relating to these limitations, we believe Comscore to be the most comprehensive and accurate source of data on consumer behaviour online available to us. Comscore is widely used both within the industries we are examining and by other government bodies. Level of measurement 12. Media owners have the option of segmenting their entities on Comscore to obtain audience metrics for a hierarchy of (sub)sections. Comscore offers six ‘tiers’ of measurement, which in descending order are: Property (P); Media Title (M); Channel (C); SubChannel (S); Group (G); and SubGroup (SG). 13. In relation to the general search sector, several search engines are operated by a company that owns many other non-search engine sites. The ‘highest level’ of reporting for these companies encompasses all these sites. For example, the ‘highest level’ of reporting for Google, is ‘Google Sites’ (P).5 However, each search engine provider also offers a segmentation to the ‘level’ of their search engine, for example Google Search (C). Generally, this was the tier of segmentation used in our analysis as outlined in Table C.1. 5 This includes all Google owned websites including YouTube, Google Search, Gmail etc. C4 Table C.1: Comscore entities analysed in general search sector Publishers (P)/ Media Search title (M)/ Channel(C)/ Notes Level of unification Engine Subchannel (S) Analysed Consists of: Google Search Desktop Browser: Panel only; Smartphone iOS (Mobile App); Google Web Browser: Panel only; Smartphone iOS Apps: Panel Search; Google Images only; Smartphone Android Browser: Panel only; Search; Google Video Google Google Search (C) Smartphone Android Apps: Panel only; Tablet iOS Search; Google News Browser: Panel only; Tablet iOS Apps: Panel only; Search; Google Book Tablet Android Browser: Not measured; Tablet Search; and Google Scholar Android Apps: Not measured. Search. Desktop Browser: Panel only; Smartphone iOS Consists of: Bing Web; Bing Browser: Panel only; Smartphone iOS Apps: Panel Images; Bing Videos; Bing only; Smartphone Android Browser: Panel only; Maps & Local; Bing Search Bing Bing (M) Smartphone Android Apps: Panel only; Tablet iOS (Mobile App); Bing News; Browser: Panel only; Tablet iOS Apps: Not measured Bing Travel; and Microsoft Tablet Android Browser: Census only; Tablet Android Translator. Apps: Not measured. Consists of: Yahoo Search; Desktop Browser: Panel only; Smartphone iOS Yahoo Answers; Yahoo Browser: Panel only; Smartphone iOS Apps: Not Local Network; and AOL measured; Smartphone Android Browser: Panel only; Verizon
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